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Wholesale Price Index, Consumer Price Index

India has two measures of inflation Wholesale Price Index and Consumer Price Index

WPI - Wholesale Price Index - WPI tracks changes in average price of goods traded in wholesale market. This is the most common measure of inflation and is extensively used for policy purposes. It considers three main product groups - primary articles, fuel and power and manufactured goods. Within each group there are subgroups and within the subgroup, smaller groups and specific items. This index covers goods which are traded between organizations instead of consumers. WPI is computed on all-India basis. The percentage increase in WPI over a year gives the rate of inflation for that year.

CPI - Consumer Price Index - CPI covers sample representative goods and services which are directly purchased by consumers. The annual percentage change in a CPI is used as a measure of inflation. The coverage of non-tradables like services pertaining to education, medical care and recreation is higher in the case of CPI. Prices of milk, meat, vegetables, fruits, housing, fuel, medicines, education, entertainment and personal care products are some of the goods and services which are monitored. Prices which include all taxes are obtained almost every week from various retailers and selected open markets.

Based on the inflation numbers RBI changes the policy rates like CRR and Reverse Repo rate. To see the latest interest rates see
Current Base, Repo Rate